Iran to sell Russia 100,000 bbl/d in cash and barter oil deal

By bne IntelliNews February 22, 2017

Iran has said it will start selling 100,000 barrels of oil a day to Russia within the next 15 days with payment to be made half in cash and half in goods and services, Iranian news agencies reported on February 21.

Iranian Oil Minister Bijan Namdar Zanganeh provided details about the agreed oil sales after meeting Russian Energy Minister Aleksandr Novak in Tehran, they added.

"We discussed swap deals. Oil for goods," Zanganeh said, according to Press TV and the Iranian Students' News Agency.

Iran can find it challenging to sell oil to other countries because almost all oil transactions worldwide are conducted in dollars while American sanctions still restrict Iran's access to dollars. Tehran thus sometimes barters its oil for other goods.

"During the meeting [with Novak], we agreed to hold a workshop in Moscow over the next few weeks on a new model of Iranian oil contracts,” Zanganeh also told reporters.

In a separate development, Novak told Russian TV channel Rossiya 24 on February 22 that he estimated the potential of contracts for oil and gas exploration in Iran by Russian companies at around $20bn.

An Iranian delegation would arrive in Russia on March 27 to present oil and gas contract terms for Russian enterprises, he added. “This will speed things up significantly,” Novak told the channel.

Tehran and Moscow's relations are smoothed by the fact that the two governments are committed to a joint strategy to back Syria's Bashar al-Assad regime amid the Syrian civil war.

When it comes to oil, things are not running so smoothly with New Delhi. Zanganeh also told Iranian media on February 21 that a deal had not yet been agreed with India for the joint development of the southern Arash oil field. “It seems unlikely that we can reach a deal with India. So Iran may start talks with others companies for this project,” he said.

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